Jeff DeWitt helped rescue Phoenix financially during the recession. Now he faces new challenges in D.C., if confirmed

Phoenix CFO Jeff DeWitt has been nominated to take over the District of Columbia’s finances, Mayor Vincent Gray announced Thursday. DeWitt’s nomination comes after longtime CFO Natwar Gandhi announced his retirement earlier this year. Gandhi, a former Governing Public Official of the Year, is staying on until DeWitt is confirmed and on the job.

If confirmed, DeWitt would become D.C.’s third CFO since the position was established by a Congressional control board in the mid 1990s. The office of CFO operates independently of the mayor and city council and has extraordinary powers that include the ability to stop any legislation that does not include funding if any additional money outside the regular budget is needed.

DeWitt, a native of Illinois, made his mark in Phoenix by shepherding the city through the recession during a time when Arizona and other western states were making headlines as the real estate market toppled under the weight of mortgage defaults. Phoenix homes lost as much as 47 percent of their value during the recession, a drop that translated into huge declines in property tax revenue for the city.

“There was really no better time to be the CFO of the sixth-largest city in the country – to come in and suddenly you’ve got 25 percent cuts that are required, you’ve got a $277 million budget deficit [on a $1 billion operating budget] and all the challenges that go with that,” DeWitt said at a press conference in D.C. Tuesday. “So you learn a lot in that process.”

Under DeWitt’s watch, Phoenix embraced new technology to reduce the cost of government to help pare it down to its smallest size in 40 years. That included reducing the workforce to about 15,000 people from 17,500; but many of the job cuts came from attrition, vacancies or transfers. By fiscal year 2012-13, the city had achieved a structurally balanced budget, increased its reserves, and added $6 million in new programs back to the general fund budget. And through it all, Phoenix maintained its AAA bond rating from Standard & Poor’s.

The experience could serve DeWitt well as he is poised to take over D.C.’s finances at a time when the city is feeling the effects of reduced federal spending. Since sequestration began this spring, the District’s unemployment rate has flatlined after months of steady decline. Job growth has also leveled off, largely thanks to reductions in the government workforce.

Gray said DeWitt’s track record in Phoenix was “hugely important” as the city’s jobs picture could get worse.

“We knew that sequestration was going to have an inordinate impact on the District of Columbia,” Gray said. “He’s going to have to manage within that environment, going to have to manage in terms of what his revenue projections are.”

DeWitt said at first he wasn’t inclined to leave his job in Arizona when approached by the D.C. CFO search committee. But a stroll around the city’s monuments (just blocks away from city hall), changed that.

“You come back up you take a right and you’re at the White House,” DeWitt said, recounting his visit during first interview with the search committee. “And right up the street are the offices of city government for Washington, D.C. I’ve been in public service my whole career … how can you take that walk if you wanted to be in public service and not want to come here?”

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